WASHINGTON ‚?? President Barack Obama‚??s re-election has stiffened Democrats‚?? spine against cutting popular benefit programs such as Medicare and Social Security. Their new resolve could become as big a hurdle to a deal that would skirt crippling tax increases and spending cuts in January as Republicans‚?? resistance to raising tax rates on the wealthy.
Just last year, Obama and top Democrats were willing during budget negotiations with Republicans to take politically risky steps such as reducing the annual inflation adjustment to Social Security and raising the eligibility age for Medicare.
Now, with new leverage from Obama‚??s big election victory and a playing field for negotiations that is more favorable in other ways, too, Senate Majority Leader Harry Reid and other Democrats are taking a harder line.
‚??I‚??ve made it very clear. I‚??ve told anyone that will listen, including everyone in the White House, including the president, that I am not going to be part of having Social Security as part of these talks relating to this deficit,‚?Ě Reid, D-Nev., told reporters.
Reid‚??s edict would appear to take a key proposal off the table as an ingredient for a deal on avoiding the ‚??fiscal cliff,‚?Ě the year-end combination of expiring President George W. Bush-era tax cuts and harsh across-the-board spending cuts.
At issue is the inflation adjustment used to calculate cost-of-living adjustments for Social Security and other federal programs. A less generous inflation measure that takes into account consumers finding alternatives when prices go up could reduce deficits by more than $200 billion over the next decade.
The chained Consumer Price Index, as it is called, would mean gradual, less noticeable curbs to the growth of benefits.
But liberals say the change could cut average retiree benefits over time.
Sixteen months ago, the White House proposed changes including the lower inflation adjustment, raising the eligibility age for Medicare and higher Medicare premiums.
That was when the playing field favored Republicans.
Now conditions favor Obama.
He decisively won re-election and Republicans seem fearful of being tagged with the blame if an impasse results in the government going over the fiscal cliff.